FOB

(noun)

Stands for "Free on Board" or "Freight on Board"; specifies which party (buyer or seller) pays for shipment and loading costs, and/or where responsibility for the goods is transferred.

Related Terms

Examples of FOB in the following topics:

  • Recognition of Revenue at Point of Sale or Delivery

    • Shipping terms are typically "FOB Destination" and "FOB Shipping Point".
    • For goods shipped under FOB destination, ownership passes to the buyer when the goods arrive at the buyer's receiving dock; at this point, the seller has completed the sales transaction and revenue has been earned and is recorded.
    • If the shipping terms are FOB shipping point, ownership passes to the buyer when the goods leave the seller's shipping dock, thus the sale of the goods is complete and the seller can recognize the earned revenue.